Long Term Investment Decision

Long-Term Investment Decisions Investment decision-making is a process whereby resources are allocated in organizations in anticipation of future gain.

The capital investment decision

Identify investment opportunities

NO

*How are projects initiated? *Is there an incentive scheme for good project ideas? *How much is available to spend?

Preliminary proposal

Project Development *Preliminary project review *Technically feasible? *Compatible with corporate strategy?

Appropriation request Evaluation/Selection *What are the costs and benefits? *What is the value or return on the project? *What are the risks involved?

Decision and implementation Control *Is the project on schedule and within budget? *What lessons can be drawn for future investment decisions?

Idea abandoned

Tools Time and cost estimates Budgets, personnel data, cash flow charts,material availability details, engineering diagrams

Project Planning *Setting goals *Defining the project *Tying needs into timed project activities *Organizing the team

Tools Gantt charts, CPM and PERT, milestone charts, cash flow schedules

Project Scheduling *Tying resources (people, money, supplies) to specific activities *Relating activities to each other *Updating and revising on regular basis

Tools Reports describing: *budgets by dept. *delayed activities *slack activities *quality of work completed

Project Controlling *Monitoring resources, costs, quality, budgets *Revising and changing plans *Shifting resources to meet times, costs, and quality demands

Time Line

Before project

During project Start of project